For years, I’ve gotten emails from retired teachers who accuse me of making things up about CalSTRS being in poor shape financially. Why? Because the newsletters from the nation’s second-largest pension fund pretend all is well — and because the Sacramento media basically went along with this crock for years. Now the head of CalSTRS finally admits that disaster looms, with 30 years of pain the result. It’s time for Sacramento journalists who covered CalSTRS back in 2006 to make like Otter and admit the following to their California readers: “You f—-ed up. You trusted us.”
It was in the spring of that year that the Legislature and the Schwarzenegger administration had a showdown over CalSTRS, played out in a fight over Arnold’s nomination of reformer David Crane to the CalSTRS board. It culminated in an early June vote of the Senate Rules Committee to kill Crane’s nomination. Senate President Don Perata, Sen. Debra Bowen and Sen. Gil. Cedillo weren’t coy about why, according to the L.A. Times:
The three Democrats on the five-member Senate panel agreed that Crane seemed too concerned about the burden of pension shortfalls on taxpayers.
GIven that CalSTRS finances were in bad shape — even then, at the height of the housing and Wall Street bubble — this of course prompted the Times and the Sac Bee and the S.F. Chronicle to denounce the Senate. This of course led to thoughtful analysis pieces about how the Legislature was being foolhardy and reckless in blocking a new era of honesty about teacher pensions.
Well, no. Nexis shows I was the only print journo in California to lambaste the Senate’s actions.
Who took Crane’s place? Surprise, surprise. A teacher.
The next year, the CalSTRS board offered up its plan to shore up its finances. The Sac Bee story detailing the plan gave the numbers but no context — i.e. that the plan amounted to waterboarding taxpayers while protecting teachers. My account from 2007:
Under the present pension funding system, school districts pay 8.25 percent of payroll toward long-term obligations, teachers and administrators give 8 percent of their paychecks and the state contributes an amount equal to about 2 percent of the payroll of CalSTRS-covered employees.
The Bee story noted that the CalSTRS board wants to change the formula by increasing employees’ contribution to 8.5 percent and gradually upping the state’s contribution to a max of 3.25 percent and gradually increasing school districts’ contributions to a max of 13 percent.
Those numbers may not jump out at you. But when you frame the CalSTRS board proposal in terms of how much more it wants each of the three pension funding sources to pay on a percentage basis, the numbers jump off the page.
To cover the long-term CalSTRS funding gap, its board says:
Teacher/administrator contributions should increase by 6.25 percent.
State general fund contributions should increase by up to 62.5 percent.
School district contributions should increase by up to 62.5 percent.
Nice ratio there, huh? Taxpayers should increase their contributions by exactly 10 times as much as employees.
The net effect: The CalSTRS board wants California taxpayers to go from footing 56 percent of the total pension tab to 66 percent, at a cost to those taxpayers of billions and billions and billions over the years.
Did any other California journo break down this assault on taxpayers? Well, no.
Now, four years later, the state media are reporting on CalSTRS woes with more honesty. But that honesty doesn’t include that part about their own failings to either detect or disclose the “pension tsunami” for years and years before it began to reach shore.
The tsunami metaphor is so apt because it conveys that we’ve known this was coming for a long time. But if the great majority of the California media knew this was coming, you’d never know it from their coverage, dating back to the ridiculous events of June 2006, when the Times, the Bee and almost every paper in the state thought it no big deal that that the state Senate would keep someone off the CalSTRS board because he “seemed too concerned about the burden of pension shortfalls on taxpayers.”